RESOLUTION NO.

013-2005
_______________________________________________________________________________________________________

APPROVING AND ADOPTING THE GUIDELINES FOR THE

IMPLEMENTATION OF INFRASTRUCTURE PROJECTS THROUGH
NEGOTIATED PROCUREMENT UNDER SEC. 54.2 (d) OF IRR-A OF
RA 9184 AND BY ADMINISTRATION
WHEREAS, Republic Act No. 9184 (R.A. 9184), otherwise known as Government
Procurement Reform Act and its Implementing Rules and Regulations Part A (IRR-A) took
effect on January 26, 2003 and October 8, 2003, respectively;
WHEREAS, under Section 53 (b) of the IRR-A, in exceptional cases expressed therein,
the procuring entity has the option to undertake infrastructure projects through negotiated
procurement, by administration or, in high security risk areas, through the Armed Forces of
the Philippines (AFP);
WHEREAS, the Government Procurement Policy Board (GPPB), through GPPB
Resolution 08-2004, adopted and approved the Guidelines for the Implementation of Projects
Undertaken By Administration or Force Account purported to standardize and provide
rules for the implementation of projects undertaken by all Departments, Bureaus, Offices and
Agencies of the National Government, Government Owned and Controlled Corporations,
Government Financing Institutions and Local Government Units, under the aforementioned
concept;
WHEREAS, under the above-stated guidelines, unless otherwise provided by law,
projects costing not more than Two Million Pesos (P2,000,000.00) may be undertaken by
administration or force account under the following circumstances: (a) In case of imminent
danger to life or property during a state of calamity, or when time is of the essence arising
from natural or man-made calamities or other causes where immediate action is necessary to
prevent damage to or loss of life or property, or to restore vital public services, infrastructure
facilities and other public utilities; or (b) when there has been failure of public bidding for the
second time as provided under Section 35 of RA 9184 and its IRR-A;
WHEREAS, there is dearth of rules and regulations defining the concept of by
administration and governing its use as a mode of implementing infrastructure project, as
provisions of already existing laws, rules, or regulations do not clarify the conditions for its
applicability and the details for its regulation;
WHEREAS, while implementation of infrastructure projects by administration is,
technically, a concept beyond procurement, its implications overreaches into the domain of
government acquisition and affects policies thereon; thus, the GPPB, in exercise of its
mandate to protect national interest in all matters affecting public procurement, deems it
necessary to clarify the concept and provide for the rules and regulations concerning its use
and application;

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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RESOLUTION NO. 013-2005

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WHEREAS, also pursuant to Section 53 (b) of the IRR-A, where in the cases
mentioned therein, the procuring entity may resort, among others, to negotiated procurement,
either through (1) short-listing of at least three (3) bidders that will be invited to submit bids
per Section 54.2 (b) of the IRR-A, or (2) direct negotiations per Section 54.2 (d) of the IRRA;
WHEREAS, Section 54.2 (d) the said IRR-A provides that for item (b) of Section 53 of
RA 9184 and its IRR-A, the negotiation shall be made with a previous supplier, contractor or
consultant of good standing of the procuring entity concerned, or a supplier, contractor or
consultant of good standing situated within the vicinity where the calamity or emergency
occurred;
WHEREAS, in order to clarify and further provide details for the application of
Negotiated Procurement under Section 54.2 (d) of the IRR-A of RA 9184, it is essential that
guidelines therefore be promulgated by the GPPB;

NOW, THEREFORE, premises considered, WE, the Members of the GOVERNMENT

PROCUREMENT POLICY BOARD, by virtue of the powers vested on US by law, hereby
RESOLVE to approve and adopt, as WE hereby approve and adopt Guidelines for the
Implementation of Invfrastructure Projects through Negotiated Procurement under Section
54.2 (d) of IRR-A of RA 9184 and By Administration.

This resolution shall take effect immediately.

APPROVED this 5th day of August 2005 at Pasig City, Philippines.

Sgd.
_____________________________________
ROMULO L. NERI
Secretary
Department of Budget and Management

_____________________________________
AUGUSTO B. SANTOS
Director General
National Economic and Development
Authority

_____________________________________
NATIONAL ECONOMIC AND
DEVELOPMENT AUTHORITY

Sgd.
_____________________________________
DEPARTMENT OF NATIONAL
DEFENSE

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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RESOLUTION NO. 013-2005

_______________________________________________________________________________________________________

Sgd.
_____________________________________
DEPARTMENT OF EDUCATION

Sgd.
_____________________________________
DEPARTMENT OF HEALTH

_____________________________________
DEPARTMENT OF INTERIOR AND
LOCAL GOVERNMENT

Sgd.
_____________________________________
DEPARTMENT OF ENERGY

_____________________________________
DEPARTMENT OF PUBLIC WORKS
AND HIGHWAYS

Sgd.
_____________________________________
DEPARTMENT OF FINANCE

Sgd.
_____________________________________
DEPARTMENT OF TRADE AND
INDUSTRY

Sgd.
_____________________________________
DEPARTMENT OF SCIENCE AND
TECHNOLOGY

Sgd.
_____________________________________
DEPARTMENT OF TRANSPORTATION
AND COMMUNICATIONS

Sgd.
_____________________________________
PRIVATE SECTOR REPRESENTATIVE

Attested by:
Sgd.
____________________________________
JOSE MARTIN C. SYQUIA
Board Secretary, GPPB
Executive Director, GPPB-TSO

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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Annex A
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GUIDELINES FOR THE IMPLEMENTATION OF INFRASTRUCTURE PROJECTS

THROUGH NEGOTIATED PROCUREMENT UNDER SEC. 54.2 (d) OF IRR-A OF
RA 9184 AND BY ADMINISTRATION

1.0

Purpose and Coverage

These guidelines shall standardize and provide rules for the use of the alternative
method of Negotiated Procurement prescribed under Section 54.2 (d) of the IRR-A of
RA 9184 and the implementation of projects undertaken by administration by all
Departments, Bureaus, Offices and Agencies of the National Government (NGA),
Government-Owned and/or Controlled Corporations (GOCCs), Government
Financing Institutions (GFIs), State Universities and Colleges (SUCs), and Local
Government Units (LGUs).
Projects undertaken by administration by the Armed Forces of the Philippines
Corps of Engineers (AFPCOE) shall be governed by the guidelines issued by the
GPPB through Resolution 09-2005 dated 28 April 2005.

2.0

Definition of Terms
For purposes of these guidelines, the following terms shall be defined as

follows:

2.1

By Administration. The procedure by which the implementation of an

infrastructure project is carried out under the administration and supervision of
the concerned agency thru its own personnel.

2.2

Force Account. Refers to the implementation of an infrastructure project by

administration and is applicable when, due to the happening of unforeseen
events, there is a need to immediately complete infrastructure works, or when
any work outside the original Contract is necessary for the completion of the
works but the costs involved cannot be determined at the outset. Although
supervised by the procuring entity, the remaining work is contracted out to a
qualified contractor and paid at actual cost plus an agreed mark-up not to
exceed ten percent (10%) mark-up. Actual cost is supported by receipt,
vouchers, payroll, etc. or the prevailing cost items in the locality. The amount
of remaining works to be completed is not more than ten percent (10%) of the
contract/project and not to exceed Two Million pesos (Php. 2,000,000.00).

2.3

Implementing Agency. Shall refer to any Department, Bureau, Office and

Agency of the National Government, or to any Government-Owned and/or
Controlled Corporation, Government Financing Institution, State University or
College, and Local Government Unit undertaking the construction of an
infrastructure project.

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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2.4

Job-Contractor. Refers to a person or entity who carries out, under his own
responsibility, supervision and control, the performance or completion of a
specific job, service or work which has been farmed out by another for the
latters benefit.

2.5

Job-order. Refers to employment of individuals to undertake piece or lump

sum works, or intermittent jobs of short duration not exceeding six months on
a daily basis.

2.6

Labor-only Contractor. Refers to a person or entity that engages in the

supply of workers/laborers to an employer but does not have substantial
capital or investment in the form of tools, equipment, machineries, work
premises, among others, and the workers recruited and placed perform
activities directly related to the principal business of the employer.

2.7

Pakyaw. A system of hiring a labor group for the performance of a specific

work and/or service incidental to the implementation of infrastructure project
by administration whereby tools and materials are furnished by the
implementing agency. For the specific work/service output, a lump-sum
payment is made either through the group leader or divided among the pakyaw
workers and disbursed using a payroll system.

2.8

Semi-skilled Work/Job. Refers to a work/job which needs some skills but

does not require doing the more complex work duties. Semi-skilled jobs may
require alertness and close attention to watching machine processes; or
inspecting, testing or otherwise looking for irregularities; or tending or
guarding equipment, property, materials, or persons against loss, damage or
injury; or other types of activities which are similarly less complex than
skilled work, but more complex than unskilled work. A job may be classified
as semi-skilled where coordination and dexterity are necessary, as when hands
or feet must be moved quickly to do repetitive tasks.

2.9

Skilled Work/Job. Skilled work requires qualifications in which a person

uses judgment to determine the machine and manual operations to be
performed in order to obtain the proper form, quality, or quantity of material
to be produced. Skilled work may require laying out work estimating quality,
determining the suitability and needed quantities of materials, making precise
measurements, reading blueprints or other specifications, or making necessary
computations or mechanical adjustments to control or regulate the work.

2.10

Unskilled Work/Job. Unskilled work is work which needs little or no

judgment to do simple duties that can be learned on the job in a short period of
time. The job may or may not require considerable strength.

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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Annex A
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3.0

Conditions and Requirements for the use of the Negotiated Procurement under
Sec. 54.2 (d) of the IRR-A of RA 9184
3.1

The implementation of infrastructure projects through Negotiated Procurement

under Section 54.2 (d) of the IRR-A of R.A. 9184 is justified only (a) where
time is of the essence to avert an imminent danger to life or property or to
restore destroyed or damaged vital water, power and transportation services
and (b) where this need arises from a state of natural or man-made calamity or
emergency as declared by appropriate authorities.

3.2

Unless otherwise approved by the President, Negotiated Procurement under

Section 54.2 (d) of the IRR-A of R.A. 9184 shall be limited to infrastructure
projects costing not more than Two Million Pesos (Php. 2,000,000.00). The
implementation of infrastructure projects attended by the conditions
mentioned in Item 3.1 (a) and (b) above, when it costs above Two Million
Pesos (Php. 2,000,000.00), shall be procured under Section 54.2 (b) of IRR-A
of RA 9184.

3.3

The Head of the Government Agency or the Local Chief Executive shall
determine or confirm and certify that the two (2) conditions mentioned in Item
3.1 (a) and (b) above exists and that there is insufficient time to complete the
procedures for public bidding or that commencing the same proves less
convenient or inefficient, and therefore, the use of Negotiated Procurement
under Section 54.2 (d) of the IRR-A of R.A. 9184 is justified.

3.4

The procuring entity shall negotiate with a contractor selected from its registry
of bona fide contractors licensed with the Philippine Contractors Accreditation
Board (PCAB) that has satisfactorily completed a contract of the same nature
with the agency. However, when the procuring entity does not maintain such
registry or has not in the past undertaken any infrastructure project, the
procuring entity may negotiate with any bona fide contractor licensed with the
PCAB, located within the vicinity where the calamity or emergency occurred
that has satisfactorily completed similar infrastructure contract(s) with any
government agency or instrumentality otherwise defined as Procuring Entity
under RA 9184.

3.5

For purposes of transparency, the procuring entity shall post in the

Government-Electronic Procurement System (G-EPS) bulletin board and in its
website, if any, general information as to the procurement activity conducted,
the recipient of the contract and the reasons for award.

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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Annex A
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4.0

Conditions and Requirements for the use of By Administration

4.1

To undertake projects by administration, the implementing agency should (a)

have a track record of having completed a project, by administration or by
contract, similar to and with a cost of at least fifty percent (50%) of the project
at hand, and (b) own the tools and construction equipment to be used or have
access to such tools and equipment owned by other government agencies.

4.2

No contractor shall be used by the procuring entity, directly or indirectly for

works undertaken by administration

4.3

The head of the implementing agency shall, before commencing any works
under this concept, certify as to the compliance of the implementing agency
with the conditions abovementioned.

4.4

Other documentary requirements for the undertaking shall include: (a) a

Detailed Engineering Plan, (b) an Equipment Schedule, (c) a Manpower
Schedule; and (d) a copy of the Memorandum of Agreement between the
Implementing Agency and the government agency or local government unit on
the lease or use of equipment in favor of the former, if applicable.

4.5

Procurement of tools and construction equipment shall be undertaken under a

Project Procurement Management Plan (PPMP).

4.6

Projects undertaken By Administration shall bear the prior approval of

head of the Implementing Agency.

4.7

Except as otherwise provided by law, the maximum amount for infrastructure

projects that may be implemented by administration shall be five million pesos
(P5,000,000.00); provided, however, that, in the case of NGAs, GOCCs, GFIs,
and SUCs, the total amount for all projects undertaken by administration shall
not exceed twenty-five percent (25%) of their budget for infrastructure
projects as reflected in their approved APP; and in the case of LGUs, not to
exceed fifty percent (50%) of the fund allotted for infrastructure projects.

4.8

In the application of Force Account, in case an Implementing Agency or any

other authorized governmental body intends or is ordered by higher authority
to cause the completion of unfinished portions of an infrastructure project
which was abandoned, interrupted or otherwise discontinued, it shall directly
contract out with a qualified contractor of known reputation and expertise in
the field of the works to be contracted, for the implementation of the
remaining works. For this purpose, unless the President otherwise approves,
the remaining portion shall not be more than ten percent (10%) of the entire
contract/project and not to exceed Two Million Pesos (P2,000,000.00).
Otherwise, the same shall be subject to competitive bidding. The project cost

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

the

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Annex A
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thereof is to be billed for at actual cost of labor, materials and equipment,

insurance, taxes, etc., plus an agreed percentage for overhead and profit
5.0

Labor Component of infrastructure projects undertaken By Administration

5.0

For projects undertaken by administration, the manual labor component may

be undertaken in-house by the implementing agency concerned, by job-order
or through the pakyaw contracting system. In-house labor is undertaken if
the workers are employees or personnel occupying regular plantilla positions
in the implementing agency. Job-order contracts shall be governed by relevant
Commission on Audit (COA) and/or Civil Service Commission (CSC) rules.

5.1

Pakyaw labor shall be drawn from the vicinity of the project, or Pakyaw labor
groups belong to various Barangay Associations contiguous to the project site.
Unskilled labor should be drawn from the Barangay where the project is
located; semi-skilled labor shall be recruited within the municipality,
preferably within the Barangay; skilled labor shall be recruited within the
province but preferably within the Barangay/Municipality.

5.2

The formation of Pakyaw Groups should actively involve the Barangay

leaders and the community. A Project Facilitator (PF) shall be appointed by
the implementing agency to assist in the organization of the Pakyaw Groups
and in the preparation of the Pakyaw Contracts. The PF shall, for purposes of
informing the community of the project and of organizing pakyaw groups,
shall convene community meetings, with the assistance of the Barangay
Chairperson/s. The PF shall cause the registration of all unemployed or
underemployed members of the community who are interested to join Pakyaw
groups being formed for the project.

5.3

The Pakyaw workers should be formed into groups of workers based on the
lump sum works. In case of competitive selection, pakyaw groups which were
not selected for a particular lump sum work may choose to compete for other
works requiring pakyaw groups.

5.4

Where there is competition for the award of Pakyaw works, the pakyaw labor
contract shall be awarded through competitive selection with at least three (3)
Pakyaw Groups participating. There is deemed to be a competition for the
award of pakyaw contracts when the number of laborers who registered during
the community meeting is more than what is reasonably needed for the lump
sum work required under the project. The competitive selection shall be done
on a per-output basis. And the winner(s) shall be determined based on what
group(s) undertake(s) to deliver the desired output at the lowest rate, either per
item of output or per lump sum work, within the required period.

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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6.0

5.5

For purposes of Item 5.4 hereof, the number of members per group shall be
determined by the Project Facilitator to ensure that at least three Pakyaw
Groups are organized for the competitive selection. The determination by the
Project Facilitator of the number of members per Pakyaw Group shall be
exercised with regard to the objective of providing work to as many laborers
as possible.

5.6

A Group Leader shall be elected from among the members of the group who
shall be the signatory to the Pakyaw Contract and any other documents
pertaining to the work on behalf of the Pakyaw Group. He may be replaced at
any time by the group through an election for that purpose, after due notice to
the Project Facilitator and the Barangay Chairperson. Any such replacement
shall not invalidate any previous Pakyaw Contract.

5.7

In no case may Pakyaw Groups be regular or licensed contractors or organized

by and/or under the management of a regular or licensed contractor. Laborers
supplied by job-contractors/labor-only contractors are likewise disqualified to
become members of the Pakyaw groups when the job-contracting/labor-only
contracting is specifically carried out for the purpose.

5.8

The amount of a pakyaw labor contract per project shall not exceed Five
Hundred Thousand Pesos (P500,000.00) per pakyaw group.

Repealing Clause
This set of guidelines repeals GPPB Resolution 08-2004 confirming, adopting and
approving the Guidelines for the Implementation of Projects Undertaken By
Administration or Force Account.

7.0

Effectivity
These Guidelines or any amendments hereto shall take effect fifteen (15) days after
publication in the Official Gazette or in a newspaper of general nationwide circulation
and upon filing with the University of the Philippines Law Center of three (3)
certified copies of these guidelines.

Annex A of GPPB Resolution No. 013-2005, dated August 05, 2005

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